"Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations."    

International Trade

At the same time, governments are signing away their control over domestic water supplies to trade agreements such as the North American Free Trade Agreement, its expected successor, the Free Trade Area of the Americas (FTAA), and the World Trade Organization. These global trade institutions effectively give transnational corporations unprecedented access to the freshwater resources of signatory countries. Already, corporations have started to sue governments in order to gain access to domestic water sources and, armed with the protection of these international trade agreements, are setting their sights on the commercialization of water.

Water is listed as a "good" in the WTO and NAFTA, and as an "investment" in NAFTA. It is to be included as a "service" in the upcoming WTO services negotiations (the General Agreement on Trade in Services) and in the FTAA. Under the "National Treatment" provisions of NAFTA and the GATS, signatory governments who privatize municipal water services will be obliged to permit competitive bids from transnational water-service corporations. Similarly, once a permit is granted to a domestic company to export water for commercial purposes, foreign corporations will have the right to set up operations in the host country.

NAFTA contains a provision that requires "proportional sharing" of energy resources now being traded between the signatory countries. This means that the oil and gas resources no longer belong to the country of extraction, but are a shared resource of the continent. For example, under NAFTA, Canada now exports 57 percent of its natural gas to the United States and is not allowed to cut back on these supplies, even to cut fossil fuel production under the Kyoto accord. Under this same provision, if Canada started selling its water to the United States--which President Bush has already said he considers to be part of the United States' continental energy program--the State Department would consider it to be a trade violation if Canada tried to turn off the tap. And under NAFTA's "investor state" Chapter 11 provision, American corporate investors would be allowed to sue Canada for financial losses [see William Greider, "The Right and US Trade Law: Invalidating the 20th Century," October 15, 2001]. Already, a California company is suing the Canadian government for $10.5 billion because the province of British Columbia banned the commercial export of bulk water.

The WTO also opens the door to the commercial export of water by prohibiting the use of export controls for any "good" for any purpose. This means that quotas or bans on the export of water imposed for environmental reasons could be challenged as a form of protectionism. At the December 2001 Qatar ministerial meeting of the WTO, a provision was added to the so-called Doha Text, which requires governments to give up "tariff" and "nontariff" barriers--such as environmental regulations--to environmental services, which include water.

The Case Against Privatization

If all this sounds formidable, it is. But the situation is not without hope. For the fact is, we know how to save the world's water: reclamation of despoiled water systems, drip irrigation over flood irrigation, infrastructure repairs, water conservation, radical changes in production methods and watershed management, just to name a few. Wealthy industrialized countries could supply every person on earth with clean water if they canceled the Third World debt, increased foreign aid payments and placed a tax on financial speculation.

None of this will happen, however, until humanity earmarks water as a global commons and brings the rule of law--local, national and international--to any corporation or government that dares to contaminate it. If we allow the commodification of the world's freshwater supplies, we will lose the capacity to avert the looming water crisis. We will be allowing the emergence of a water elite that will determine the world's water future in its own interest. In such a scenario, water will go to those who can afford it and not to those who need it.

This is not an argument to excuse the poor way in which some governments have treated their water heritage, either squandering it, polluting it or using it for political gain. But the answer to poor nation-state governance is not a nonaccountable transnational corporation but good governance. For governments in poor countries, the rich world's support should go not to profiting from bad water management but from aiding the public sector in every country to do its job.

The commodification of water is wrong--ethically, environmentally and socially. It insures that decisions regarding the allocation of water would center on commercial, not environmental or social justice considerations. Privatization means that the management of water resources is based on principles of scarcity and profit maximization rather than long-term sustainability. Corporations are dependent on increased consumption to generate profits and are much more likely to invest in the use of chemical technology, desalination, marketing and water trading than in conservation.

Depending on desalination technology is a Faustian bargain. It is prohibitively expensive, highly energy intensive--using the very fossil fuels that are contributing to global warming--and produces a lethal byproduct of saline brine that is a major cause of marine pollution when dumped back into the oceans at high temperatures.

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